Workforce Solutions
Culture-Leaders: expat management teams

By Michelle Porter

Is your company prepared to manage an operation overseas? The presence of senior leadership with experience living and working abroad has become an important factor in whether a multinational company succeeds or fails in a global marketplace.

Over the past five years, the average number of employees of all nationalities working abroad for North American-based companies has risen by 39 percent, reports Chief Executive magazine. At the same time, the percentage of American expatriates has shrunk. In 1997, North Americans filled almost three-quarters of expatriate positions at U.S. and Canadian companies. Today, they account for just over half.

Meanwhile, the number of foreign nationals is steadily increasing among senior managers in American-based firms. These non-Americans possess business skills equal to their U.S. counterparts, as well as and political expertise—a key part of building an international management team.

“All companies doing business in the global market have learned that business success depends heavily on their managers’ knowledge and experience of the culture in which they do business,” says Sondra Sen, president of Sherisen International, a cross-cultural business training company. “There are many examples of business failure when business decisions and practices did not take into account local preferences, customs, values and communication styles.”

Sen conducts training workshops for major corporations on global awareness, international team-building and expatriate training for managers and families relocating overseas. Developing a management pool for expatriate assignment is critical for a company’s overall global strategy, she says. “Members of this pool should be trained together as a team to develop a common understanding of doing business in the global marketplace.”

David Bancroft is the managing director of Cilag AG in Schaffhausen, Switzerland. Cilag, a fully owned subsidiary of U.S.-based Johnson & Johnson, develops active pharmaceutical ingredients and drug products. Bancroft has lived and worked in Switzerland for 14 years. “The integration within the local society was difficult at first, not having a full handle on the language in the beginning and being too focused on my work,” he says. “After a year, I settled in, learned the language and balanced my work and life better.”

When setting up a team completely composed of expatriates, Bancroft advises that companies include local managers within the team. These people should know the local environment, culture and legal rules—including knowledge of basic issues such as building permits and safety regulations. “This will help with language issues and interpretations as well as setting up good contacts with local government officials,” he says.

“Also, ensure that some of the expatriates have enough experience in leading teams and managing businesses and, if possible, have already had an overseas assignment,” Bancroft continues. “There is no better way to be accepted by the local employees and supporting management team than for one to be good at what one does, have sound judgment, have a strong ethical value system and embrace diversity in people. Attempting to learn and speak the local language, if different from the mother tongue, also helps gain acceptance from the employees and the community.”

Often, local companies specialize in integrating expatriates, such as searching for housing, Bancroft says. “Proper staffing at the home-country headquarters, as well as a small group at the local company, will work wonders to ease the pain of relocation for the executives and their families.”

The spouse is a key member of the transition, Bancroft says. “If the spouse does not have a sense of adventure or is not considered properly, the assignment could cause great distraction or even fail.” Bancroft was single when he relocated to Switzerland, which he says was easier in many ways when moving to a foreign country to work.

“Finally, good local legal—including tax and finance—counsel is important, even if there is a strong legal group in the home country,” Bancroft advises. “Local laws are just different in many instances and attention is needed to adhere to the laws in the country in which one works.”

An international management team must respond to changing business environments and demographics when opening new markets. Companies should have a good intelligence system and understand the trends in the local or regional markets where they deal or want to do business, Bancroft says. They should also be aware of the global changes that could impact that local or regional market.

“First, companies should have an effective environmental scanning system that tracks social, political, economic and technological changes continuously,” advises Sen. “Second, they need a nimble strategy that can shift quickly to meet the demand of unexpected environmental changes. Third, companies should have an active two-way communication system to ensure that workers and leaders are on the same track for strategy implementation.”

Increasingly, companies are recognizing the link between cross-cultural training for employees and global competitiveness, Sen wrote in an article for National Business Employment Weekly. Through education, training and international travel, they can create a cadre of managers who can ensure global success.